I wonder why the post discusses the pollution of gold mining with all costs included while for bitcoin it's only the energy consumption of running the network.
Wouldn't the comparison make more sense to include the hardware production, hardware lifetime, etc costs of running the bitcoin network as well?
Because this post was made by a Bitcoin enthusiast that calls it a "Bank of God" in a previous post. The author himself even posted this article in HN comments a few times in the last few days and the post itself has been submitted a few times as a response to "Bitcoin is pollution".
The whole post is heavily subjective and skewed heavily towards Bitcoin. Taking Gold as a "counter" and throwing around random statistic "I'll assume 10%" is a move that really shows you that the post is not to be taken seriously. Should we replace all Gold mines with BTC mines? But how will we make the hardware for mining BTC then?
Not to mention that it isn't even talking about the obvious question - on top of all current pollution, is adding Bitcoin as another huge source of pollution worth to humanity or is it just individual/collective greed of people with vested interest in Bitcoin that is propagating it as such?
Miners will work only if they are profitable. It means, that they should get more income in $, than they spend for electricity. That might not be true for some periods of time, but generally this is true.
Miners get block reward + transaction fees. Block rewards are halving every few years. Transaction fees are harder to estimate, but I don't think that they'll rise significantly. Last mined block rewarded miner with 6.25 BTC + 0.83 BTC. I think that it's reasonable to expect that rewards per block will be limited to some number, say 50 BTC.
So miner gets <=50 BTC for his efforts. He exchanges those BTC to USD (or Yuan or whatever) and pays for electricity. Block is mined every 10 minutes in the entire world. When I'm talking about miner, I'm talking about all miners combined.
So basically his energy spendings are limited by 50 BTC * BTC rate. Last block had 7 BTC reward, with 45650 USD/BTC rate it means that global miner community can afford $300k every 10 minutes to spend for electricity. Of course I'm not calculating hardware costs, salaries, margins, so in reality it's even less.
What I'm trying to convey is that global bitcoin electricity consumption is limited by something like 50 * BTC price per 10 minutes. And BTC exchange rate is not limitless. So even if bitcoin electricity consumption is huge, it won't consume all our Earth resources. I'll be a tiny chunk of our energy consumption.
There's 190,040 tons of mined gold in the world. 1 ton is 60 million USD, so there's $11 trillion worth of gold in the world. There could only be 21 million of bitcoins. That makes $543 000 as a higher estimate for possible bitcoin price if it would replace gold (and I don't really see it happening).
Is anyone else bothered by "The Definitive Answer" in the title? It implies the author presents irrefutable argument and if you don't agree then you're wrong, by definition.
I keep seeing discussions of this include something like 'but it will all be moving to proof of stake soon', which seems to me a bit like arguing for how green air travel is by saying we'll have solar powered airplanes soon.
A lot of faith seems to be being placed in an unproven advance, which if it is really possible at all (and that's a much bigger if than many acknowledge), would introduce all sorts of new problems.
The author posits that Bitcoin will move to a Proof-of-Stake (PoS) system soon, but I am doubtful.
How would Bitcoin move to a PoS system? The miners directly determine what happens on the network by the very nature of the mining process and the miners have a vested interest in PoW. The other people in the Bitcoin universe mostly use it as a store of value (and would benefit from PoS) but their value is essentially held hostage by the miners.
I understand the bitcoin holders can just sell and move to another chain/coin, but a mass exodus would effectively destroy their stored value as there will be way more sellers than buyers. So the miners can essentially keep doing what they are doing as long as they don't bleed off too many users.
If bitcoin would change its algorithm, it will lead to fork. Miners will stay on old fork. Some people will move to new fork. So there will be two bitcoins used by two communities. Which fork will be used by most people is questionable. In the end USD/BTC is all that matters. I don't really see majority of bitcoin users migrating to PoS, but I might be wrong about that.
What’s more likely to happen is to have users fork off to a different PoW algorithm or even PoS, rendering the mining equipment of miners useless. If the economic majority of users run the new fork software, the network effects and value of Bitcoin gets preserved. This is how the segwit movement managed to pressure miners into activating the segwit soft fork.
This is a well-done analysis. Unfortunately, bitcoin is not replacing gold. They're being mined side-by-side. Eventually the damage will be done, yes bitcoin might become the primary value storing currency. But we'll have tons and tons of gold to sit on, maybe use in very small amounts in manufacturing, and the effect it had on the environment is already done.
I would totally be on board with bitcoin if it was directly replacing gold, but let's be honest and admit that no one is mining bitcoin because they believe it's a more environmentally friendly gold (which it's not, really).
For more articles on Bitcoin and Pollution, see the Yes, Bitcoin is a Ponzi page [1] collecting many articles over the years on the gigantic CO2 and electronic waste environmental disaster.
[1] https://github.com/openblockchains/bitcoin-ponzi
Gold is something fundamental in this universe -- a chemical element. Bitcoin will become outdated as technology changes, so as a store of value it's inferior long term. Gold is also actually useful in many technological processes.
>The cost of mining gold each year is therefore US$97.6B.
That's not the cost of mining. That's the market cost of gold mined this year.
Also, the presupposition that gold pollutes far more is not backed by any evidence and or reasoning. Fuel used in China to power bitcoin farms had been mined somewhere, with corresponding pollution and other externalities. To compare pollution between these two one has to develop a criteria/scoring system for various forms of pollution, and go through a lot of data.
I think either is fine, the real missing thing is how much energy these other payment processors use to clear. I’d hazard a guess not as much as the he whole of Chile.
i cant believe you would ignore all the actual uses of gold besides a store of value. its crucial to lots of things. also, isnt bitcoin going to continually eat up energy, whereas gold takes energy to get out of the ground but mostly doesnt after that?